Sterling Bancorp Reports Net Income Of $20.0 Million For 2012, Increasing 14% From The Prior Year
REVENUE GROWTH, EXPENSE CONTROL AND CONTINUED SOUND ASSET QUALITY DRIVE STRONG PERFORMANCE FOR FULL YEAR AND FOURTH QUARTER OF 2012

LOANS GROW 17% AND DEPOSITS RISE 14%, REACHING RECORD LEVELS

NEW YORK, Jan. 24, 2013 /PRNewswire/ --

Strong Financial Performance

Net income available to common shareholders was $20.0 million or $0.65 per diluted share for the full year and $5.2 million or $0.17 per diluted share for fourth quarter 2012.

Pre-tax income rose 31% for the full year and 58% in the fourth quarter of 2012, before the effect of a net tax benefit of approximately $1.9 million in the 2011 periods.

Gross revenues were $145.7 million for the full year 2012, an increase of $5.1 million over 2011.

Growth in gross revenues of 4% for 2012 exceeded the noninterest expense increase of 2%.

Net interest margin increased 16 basis points to 4.17% for full year 2012.

Net income available to common shareholders rose to $20.0 million for the full year 2012, from $15.5 million in 2011. Pre-tax income was $28.6 million in 2012, 31% higher than the amount reported for 2011. Diluted earnings per common share were $0.65 for 2012, up from $0.51 a year ago. Results for the full year 2011 included $2.1 million of dividends on preferred shares and accretion related to TARP preferred shares and warrants to purchase common shares, which were redeemed in April 2011.

For the 2012 fourth quarter, net income available to common shareholders was $5.2 million, or $0.17 per diluted share. In the 2011 fourth quarter, Sterling recorded a tax benefit of approximately $1.9 million, or $0.06 per diluted share. Including this tax benefit, net income available to common shareholders for the 2011 fourth quarter was $5.3 million or $0.17 per diluted share. Pre-tax income for the 2012 fourth quarter, excluding the effect of the year-ago tax benefit, rose 58% to $7.1 million.

Selected Financial Highlights

Year Ended

12/31/12

12/31/11

EARNINGS HIGHLIGHTS

Income before income taxes (in millions)

$28.6

$21.8

Net income available to common shareholders (in millions)

$20.0

$15.5

Diluted earnings per common share

$0.65

$0.51

Net interest margin

4.17%

4.01%

Return on average assets

0.78%

0.70%

Return on average tangible equity

9.80%

8.72%

AVERAGE BALANCE SHEET HIGHLIGHTS (in millions)

Year Ended

12/31/12

12/31/11

Total investment securities

$755.4

$851.0

Loans, net of unearned discount

$1,583.8

$1,379.4

Demand deposits

$782.8

$596.6

Total deposits

$2,081.8

$1,921.7

Total assets

$2,576.8

$2,508.2

ASSET QUALITY HIGHLIGHTS (period end)

Nonaccrual loans/loans (1)

0.33%

0.42%

Nonperforming assets/assets

0.27%

0.33%

Allowance for loan losses/nonaccrual loans

377.36%

315.02%

(1) Includes loans held for sale and loans held in portfolio.

2012 Results Reflect Business Growth, Higher Profitability

"Sterling delivered outstanding growth and strong profitability in 2012," said Louis J. Cappelli, Sterling's Chairman and Chief Executive Officer. "Our accomplishments during the year were noteworthy for double-digit increases in loans and deposits, as we continued to capitalize on opportunities to serve the needs of customers in the dynamic New York metropolitan area marketplace and beyond. We delivered higher gross revenues, through an increase in interest income and diverse sources of noninterest income. In addition, we maintained disciplined management of operating expenses, even as we expanded the business organically and through an accretive acquisition, while our sound asset quality metrics were further strengthened."

"We have consistently pointed to our strategic focus on redeploying assets from lower yielding investments into higher yielding loans, and our results in 2012 benefitted from the successful execution of this strategy. This has led to higher loan balances, a more profitable earning asset mix, and a higher net interest margin, enabling Sterling to counter the margin compression that many other banks have experienced due to prevailing low interest rates. Our loan portfolio grew by 17% year-over-year and reached an all-time high of $1.8 billion at year end. Loans represented over 65% of earning assets for 2012 on average, a meaningful increase versus a year ago. Deploying our assets more profitably led to a 16 basis point increase in the net interest margin for the year 2012. Our model is built upon providing a portfolio of financial solutions for businesses, and the growth in our business activity produced higher noninterest income, as well as higher demand deposit balances."

"Another highlight of 2012 was our well-timed and successful acquisition of Universal Mortgage, Inc. in the third quarter. This transaction was planned in advance of the current rebound in the mortgage market and, as expected, has proven to be an excellent source of additional mortgage volume and higher mortgage banking income. Reflecting the positive impact of the Universal acquisition, and the growth in our overall mortgage banking business, we saw a sharp increase in mortgage banking income in the 2012 fourth quarter. We believe there are opportunities to expand upon Universal's well-established presence and relationships in Brooklyn, a market that is experiencing exceptional growth and has a high demand for all of our financial products. We plan to open a new Brooklyn location in the 2013 first quarter to serve both as a branch and as new and expanded offices for Universal Mortgage."

"We believe the positive momentum we experienced in 2012 is continuing and that Sterling is well positioned for 2013. Our performance in the year ahead should continue to benefit from the strengths and strategies that drove our solid results last year. Our team has demonstrated its ability to grow the business. We believe that our ability to redeploy our assets, while generating revenue from a diverse and balanced range of sources, and serving the needs of customers in a vibrant marketplace with our dedicated team of talented professionals will continue to contribute to enhanced shareholder value going forward," Mr. Cappelli stated.

Net Interest Income

Net interest income was $93.9 million for the full year 2012, up 8% from 2011. This primarily reflected a higher yield on earning assets due to the Company's previously noted strategy of shifting its asset mix toward loans from investment securities, as well as a lower cost of funds largely due to disciplined deposit pricing. For the fourth quarter of 2012, net interest income increased nearly 9% from the 2011 period, to $24.8 million.

Noninterest Income

Total noninterest income for full year 2012 was $40.8 million, relatively unchanged from a year ago. For the 2012 fourth quarter, total noninterest income was $9.6 million, up from $9.2 million in the 2011 period. The increase in the 2012 fourth quarter primarily reflected a sharp rise in mortgage banking income, which was partially offset by lower accounts receivable management and other related fees. Noninterest income was a significant contributor to Sterling's financial performance, representing 28% of total revenue for the full year 2012.

Noninterest Expenses

Sterling strengthened its operating leverage during 2012, as the rate of growth in noninterest expenses was exceeded by the increase in gross revenues. Personnel and occupancy expenses rose modestly due to investments to support new business development and the addition of Universal Mortgage, while this increase was largely offset by declines in other key expense categories. As a result, total noninterest expenses increased by approximately 2% for full year 2012 to $95.9 million. For the 2012 fourth quarter, noninterest expenses rose less than 2% from the prior year period, to $24.9 million.

Record Loans and Deposits

Loans, net of unearned discount were a record $1.8 billion as of December 31, 2012, an increase of approximately 17% from a year earlier. The ratio of loans to deposits was 78% at December 31, 2012.

Total deposits were a record $2.3 billion at December 31, 2012, increasing 14% from a year earlier. Noninterest-bearing demand deposits represented over 40% of total deposits, among the highest ratios of demand to total deposits in the industry. The growth in demand deposits reflects the Company's emphasis on generating such deposits as part of its customer relationship model.

Total assets increased to $2.7 billion and earning assets were $2.6 billion at December 31, 2012. The yield on earning assets rose six basis points to 4.64% for the full year 2012, reflecting the Company's strategy of redeploying assets into higher yielding loans from lower yielding investment securities.

Asset Quality

"Sterling maintained our longstanding underwriting discipline while increasing our lending to creditworthy borrowers, leading to continued strong credit quality metrics during 2012. It is significant to note that our allowance for loan losses has increased as charge-offs have continued to decline, and that our earnings improvement did not benefit from a reduced allowance for loan losses, as has been the case at some banking institutions," Mr. Cappelli said.

Net charge-offs were $7.7 million for the year 2012, compared to $10.2 million for 2011. The allowance for loan losses as a percentage of nonaccrual loans was 377% at December 31, 2012, versus 315% a year earlier. Nonperforming assets were $7.4 million or 0.27% of total assets at December 31, 2012, compared to $8.3 million or 0.33% a year earlier. The allowance for loan losses as a percentage of portfolio loans was 1.35% at December 31, 2012, compared to 1.36% a year earlier. The provision for loan losses was $2.5 million and $10.3 million for the fourth quarter and full year 2012, compared with $3.0 million and $12.0 million for the respective 2011 periods.

Capital

The Company's capital base has continued to exceed all regulatory requirements for well-capitalized institutions. At December 31, 2012, Sterling's Tier 1 risk-based capital ratio was 11.49% (compared to a requirement of 6.00%), total risk-based capital was 12.58% (requirement of 10.00%), and the Tier 1 leverage ratio was 9.14% (requirement of 5.00%). The tangible common equity ratio was 7.50% at December 31, 2012.

Conference Call

Sterling Bancorp will hold a conference call on Thursday, January 24, 2013, at 10:00 a.m. Eastern Time to discuss these financial results. To access the conference call live, interested parties may dial 800-230-1096 at least 10 minutes prior to the call.

A replay of the conference call will be available beginning at approximately 1:00 p.m. Eastern Time on January 24, 2013, until 11:59 p.m. Eastern Time on February 7, 2013. To access the replay by telephone, interested parties may dial 800-475-6701 and enter the Access Code 279219.

About Sterling Bancorp

Sterling Bancorp (NYSE: STL) is a New York City-based financial corporation with assets of $2.7 billion. Since 1929, Sterling National Bank, the Company's principal banking subsidiary, has successfully served the needs of businesses, professionals and individuals in the NY metropolitan area and beyond. Sterling is well-known for its high-touch, hands-on approach to customer service and a special focus on serving the business community.

Certain statements in this press release, including, but not limited to, statements as to future results of operations, liquidity, interest rate risk, operating expenses, financial position, dividends and other events, plans and objectives for future operations, capital, liquidity and growth, statements concerning the economic environment, asset quality and future levels of nonaccrual loans, charge-offs and provisions for loan losses, our ability to continue capitalizing on opportunities to serve the needs of customers in the New York metropolitan market and beyond, as well as the strength of that market, to redeploy assets from lower yielding investments into higher yielding loans, to improve our earning asset mix, net interest margin and demand deposit balances, to counter margin compression, to effectively provide a portfolio of financial solutions for businesses, to continue to achieve additional mortgage volume and higher mortgage banking income from the Universal acquisition or otherwise, and to expand on Universal's well-established presence and relationships in Brooklyn, the extent to which Brooklyn will experience continued growth and high demand for our financial products, our success in opening a Brooklyn location for Universal in the 2013 first quarter, the continuation of positive momentum for our business into 2013, whether our performance in 2013 will continue to benefit from the strengths and strategies that drove our results in 2012, our team's ability to grow the business both organically and through acquisitions, whether acquisitions will be available and permissible and, if so, whether they will be well executed and contribute to growth, whether our strategy will continue to be to redeploy our assets, while generating revenue from a diverse and balanced range of sources, and serving the needs of customers and, if so, whether we can execute that strategy and enhance shareholder value going forward, whether we can continue to shift our asset mix toward loans from investment securities, our ability to maintain underwriting discipline, and other statements contained herein regarding matters that are not historical facts, are "forward-looking statements" as defined in the Securities Exchange Act of 1934. These statements are not historical facts but instead are subject to numerous assumptions, risks and uncertainties, and represent only the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside its control. Any forward-looking statements the Company may make speak only as of the date on which such statements are made. The Company's actual results and financial position may differ materially from the anticipated results and financial condition indicated in or implied by these forward-looking statements, and the Company makes no commitment to update or revise forward-looking statements to reflect new information or subsequent events or changes in expectations. For a discussion of some of the risks and important factors that could affect the Company's future results and financial condition, see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Statements and Factors that Could Affect Future Results" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

STERLING BANCORP

Consolidated Financial Highlights

(Unaudited)

(dollars in thousands, except per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

BALANCE SHEET HIGHLIGHTS

Period End Balances

Investment securities

$683,245

$677,871

$683,245

$677,871

Loans held for sale

121,237

43,372

121,237

43,372

Loans held in portfolio,

net of unearned discount

1,649,753

1,473,309

1,649,753

1,473,309

Interest bearing deposits with other banks

112,886

126,448

112,886

126,448

Total earning assets

2,574,593

2,329,486

2,574,593

2,329,486

Allowance for loan losses

22,347

20,029

22,347

20,029

Total assets

2,749,711

2,493,297

2,749,711

2,493,297

Demand deposits

924,351

765,800

924,351

765,800

Savings, NOW and money market deposits

701,692

565,423

701,692

565,423

Time deposits

642,041

657,848

642,041

657,848

Customer repurchase agreements

32,950

47,313

32,950

47,313

Advances FHLB/Long-term borrowings

127,039

148,507

127,039

148,507

Shareholders' equity

228,090

220,821

228,090

220,821

Average Balances

Investment securities

718,377

751,832

755,399

850,997

Loans held for sale

84,051

34,107

49,358

27,954

Loans held in portfolio,

net of unearned discount

1,659,001

1,447,410

1,534,478

1,351,407

Interest bearing deposits with other banks

65,532

213,713

58,836

93,561

Total earning assets

2,534,429

2,455,554

2,406,089

2,332,689

Total assets

2,708,674

2,637,788

2,576,812

2,508,184

Demand deposits

849,094

711,011

782,771

596,608

Savings, NOW and money market deposits

686,271

611,691

653,292

596,007

Time deposits

690,283

788,800

645,745

729,053

Customer repurchase agreements

39,079

45,328

39,318

42,911

Advances FHLB/Long-term borrowings

127,165

148,630

139,067

155,332

Shareholders' equity

233,856

218,728

227,619

224,820

ASSET QUALITY HIGHLIGHTS

Period End

Net charge-offs

$2,278

$2,518

$7,725

$10,184

Nonaccrual loans

5,922

6,358

5,922

6,358

Other real estate owned

1,452

1,929

1,452

1,929

Nonperforming assets

7,374

8,287

7,374

8,287

Nonaccrual loans/loans (1)

0.33%

0.42%

0.33%

0.42%

Nonperforming assets/assets

0.27%

0.33%

0.27%

0.33%

Allowance for loan losses/loans (2)

1.35%

1.36%

1.35%

1.36%

Allowance for loan losses/nonaccrual loans

377.36%

315.02%

377.36%

315.02%

CAPITAL RATIOS

Period End

Tier 1 risk based

11.49%

12.61%

11.49%

12.61%

Total risk based

12.58%

13.71%

12.58%

13.71%

Leverage

9.14%

9.02%

9.14%

9.02%

Equity/ assets

8.30%

8.86%

8.30%

8.86%

Tangible common equity

7.50%

8.01%

7.50%

8.01%

Book value per common share

$7.37

$7.14

$7.37

$7.14

Return on average equity

8.85%

9.68%

8.79%

7.83%

Return on average tangible equity

9.84%

10.82%

9.80%

8.72%

(1) The term "loans" includes loans held for sale and loans held in portfolio.

(2) The term "loans" includes loans held in portfolio only.

Page 7 of 16

STERLING BANCORP

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands, except number of shares)

December 31,

2012

2011

ASSETS

Cash and due from banks

$

38,944

$

31,046

Interest-bearing deposits with other banks

112,886

126,448

Investment securities

Available for sale (at estimated fair value)

296,837

270,014

Held to maturity (at amortized cost)

386,408

407,857

Total investment securities

683,245

677,871

Loans held for sale

121,237

43,372

Loans held in portfolio, net of unearned discounts

1,649,753

1,473,309

Less allowance for loan losses

22,347

20,029

Loans held in portfolio, net

1,627,406

1,453,280

Federal Reserve Bank and Federal Home Loan Bank stock, at cost

7,472

8,486

Customers' liability under acceptances

-

4

Goodwill

22,901

22,901

Premises and equipment, net

22,578

23,625

Other real estate

1,452

1,929

Accrued interest receivable

6,853

6,838

Cash surrender value of life insurance policies

54,553

53,446

Other assets

50,184

44,051

$

2,749,711

$

2,493,297

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

Demand

$

924,351

$

765,800

Savings, NOW and money market

701,692

565,423

Time

642,041

657,848

Total deposits

2,268,084

1,989,071

Securities sold under agreements to repurchase - customers

32,950

47,313

Securities sold under agreements to repurchase - dealers

-

5,000

Commercial paper and other short-term borrowings

15,345

13,485

Advances - FHLB

101,265

122,733

Long-term borrowings - subordinated debentures

25,774

25,774

Acceptances outstanding

-

4

Accrued interest payable

649

1,064

Accrued expenses and other liabilities

77,554

68,032

Total liabilities

2,521,621

2,272,476

Shareholders' equity

228,090

220,821

$

2,749,711

$

2,493,297

MEMORANDA

Available for sale securities - amortized cost

$

291,574

$

271,729

Held to maturity securities - estimated fair value

403,218

425,775

Shares outstanding

Common issued

35,263,768

35,225,110

Common in treasury

4,307,972

4,300,278

NOTE: Certain reclassifications have been made to prior period's financial data to conform to current financial statement presentations.

Page 8 of 16

STERLING BANCORP

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

INTEREST INCOME

Loans

$

22,758

$

20,245

$

83,982

$

75,251

Investment securities - available for sale

1,946

2,333

9,172

10,453

Investment securities - held to maturity

2,612

3,133

11,196

13,363

FRB and FHLB stock

127

130

409

371

Deposits with other banks

39

135

136

227

Total interest income

27,482

25,976

104,895

99,665

INTEREST EXPENSE

Savings, NOW and money market deposits

655

703

2,586

2,855

Time deposits

1,023

1,371

4,151

5,583

Securities sold u/a/r - customers

34

41

141

186

Securities sold u/a/r - dealers

-

17

31

66

Federal funds purchased

2

-

22

14

Commercial paper and other

short-term borrowings

12

9

43

45

Advances - FHLB

419

497

1,913

2,144

Long-term subordinated debentures

524

524

2,094

2,094

Total interest expense

2,669

3,162

10,981

12,987

Net interest income

24,813

22,814

93,914

86,678

Provision for loan losses

2,500

3,000

10,250

12,000

Net interest income after provision for loan losses

22,313

19,814

83,664

74,678

NONINTEREST INCOME

Accounts receivable management/

factoring commissions and other fees

3,947

5,560

19,131

22,371

Service charges on deposit accounts

1,333

1,269

5,301

5,093

Trade finance income

460

487

1,922

2,222

Other customer related service charges and fees

286

235

1,001

943

Mortgage banking income

2,977

1,047

10,275

6,315

Income from life insurance policies

276

280

1,315

1,140

Securities gains

323

257

1,813

2,491

Gain(Loss) on sale of OREO

14

-

(61)

-

Other income

25

64

76

323

Total noninterest income

9,641

9,199

40,773

40,898

NONINTEREST EXPENSES

Salaries

11,774

11,040

45,530

43,748

Employee benefits

3,824

3,448

14,902

13,898

Total personnel expense

15,598

14,488

60,432

57,646

Occupancy and equipment expenses, net

3,644

3,391

13,689

13,248

Advertising and marketing

623

713

2,815

2,792

Professional fees

1,347

1,771

4,841

5,219

Communications

521

442

2,029

1,756

Deposit insurance

561

543

2,229

2,747

Other expenses

2,579

3,191

9,849

10,376

Total noninterest expenses

24,873

24,539

95,884

93,784

Income before income taxes

7,081

4,474

28,553

21,792

Provision(Benefit) for income taxes

1,881

(864)

8,537

4,196

Net income

5,200

5,338

20,016

17,596

Dividends on preferred shares and accretion

-

-

-

2,074

Net income available to

common shareholders

$

5,200

$

5,338

$

20,016

$

15,522

Page 9 of 16

STERLING BANCORP

Consolidated Statements of Income

(Unaudited)

(dollars in thousands, except per share data)

(continued)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

Average number of common shares outstanding

Basic

30,857,367

30,789,539

30,828,293

30,038,047

Diluted

30,857,367

30,789,539

30,828,293

30,038,047

Net income available to common

shareholders per average common share

Basic

$

0.17

$

0.17

$

0.65

$

0.51

Diluted

0.17

0.17

0.65

0.51

Dividends per common share

0.09

0.09

0.36

0.36

Page 10 of 16

STERLING BANCORP

Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

Net income

$

5,200

$

5,338

$

20,016

$

17,596

Other comprehensive (loss) income,

net of tax:

Unrealized holding gains on securities

arising during the period

139

1,502

4,878

244

Reclassification adjustment for securities

gains included in net income

(179)

(547)

(1,006)

(1,382)

Pension liability adjustment - net actuarial

losses

(8,438)

(2,006)

(8,438)

(2,006)

Amortization of:

Prior service cost

5

9

21

35

Net actuarial losses

626

514

2,270

1,780

Comprehensive (loss) income

$

(2,647)

$

4,810

$

17,741

$

16,267

STERLING BANCORP

Consolidated Statements of Changes in Shareholders' Equity

(Unaudited)

(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

Balance, at beginning of period

$

233,436

$

218,685

$

220,821

$

222,742

Net income for period

5,200

5,338

20,016

17,596

Common shares issued

-

-

375

36,454

compensation expense

85

107

360

394

Preferred shares redeemed in connection

with the TARP Capital Purchase Program

-

-

-

(42,000)

Repurchase of warrant

-

-

-

(945)

Cash dividends - common shares

(2,784)

(2,781)

(11,132)

(11,122)

Cash dividends - preferred shares

-

-

-

(945)

Surrender of shares issued under

incentive compensation plan

-

-

(75)

(24)

Unrealized holding gains on securities

arising during the period

139

1,502

4,878

244

Reclassification adjustment for securities

gains included in net income

(179)

(547)

(1,006)

(1,382)

Pension liability adjustment - net actuarial

losses

(8,438)

(2,006)

(8,438)

(2,006)

Amortization of:

Prior service cost

5

9

21

35

Net actuarial losses

626

514

2,270

1,780

Balance, at end of period

$

228,090

$

220,821

$

228,090

$

220,821

Page 11 of 16

STERLING BANCORP

Average Balance Sheets

[1]

(Unaudited)

(dollars in thousands)

Three Months Ended

December 31, 2012

December 31, 2011

AVERAGE

AVERAGE

AVERAGE

AVERAGE

BALANCE

INTEREST

RATE

BALANCE

INTEREST

RATE

Assets

Interest-bearing deposits with other banks

$

65,532

$

39

0.24

%

$

213,713

$

135

0.25

%

Investment Securities

Available for sale - taxable

315,269

1,780

2.26

305,542

2,125

2.78

Held to maturity - taxable

250,624

1,229

1.96

288,493

1,743

2.42

Tax-exempt [2]

152,484

2,383

6.25

157,797

2,461

6.24

Total investment securities

718,377

5,392

3.00

751,832

6,329

3.37

FRB and FHLB stock [2]

7,468

129

6.88

8,492

130

6.17

Loans, net of unearned discount [3]

1,743,052

22,758

5.20

1,481,517

20,245

5.64

Total Interest-Earning Assets [2]

2,534,429

28,318

4.43

%

2,455,554

26,839

4.43

%

Cash and due from banks

41,235

44,890

Allowance for loan losses

(23,701)

(20,849)

Goodwill

22,901

22,901

Other

133,810

135,292

Total Assets

$

2,708,674

$

2,637,788

Liabilities and Shareholders' Equity

Interest-bearing deposits

Domestic

Savings

$

24,811

1

0.02

%

$

18,545

1

0.03

%

NOW

220,227

60

0.11

203,280

83

0.16

Money market

441,233

594

0.54

389,866

619

0.63

Time

690,283

1,023

0.59

788,800

1,371

0.69

Total Interest-Bearing Deposits

1,376,554

1,678

0.48

1,400,491

2,074

0.59

Borrowings

Securities sold u/a/r - customers

39,079

34

0.35

45,328

41

0.36

Securities sold u/a/r - dealers

-

-

-

5,000

17

1.30

Federal funds purchased

3,740

2

0.22

-

-

-

Commercial paper and other

short-term borrowings

16,167

12

0.29

16,827

9

0.23

Advances - FHLB

101,391

419

1.65

122,856

497

1.61

Long-term borrowings - sub debt

25,774

524

8.38

25,774

524

8.38

Total Borrowings

186,151

991

2.13

215,785

1,088

2.02

Total Interest-Bearing Liabilities

1,562,705

2,669

0.68

%

1,616,276

3,162

0.78

%

Noninterest-bearing demand deposits

849,094

711,011

Total including noninterest-bearing

demand deposits

2,411,799

2,669

0.45

%

2,327,287

3,162

0.56

%

Other liabilities

63,019

91,773

Total Liabilities

2,474,818

2,419,060

Shareholders' equity

233,856

218,728

Total Liabilities and Shareholders' Equity

$

2,708,674

$

2,637,788

Net interest income/spread [2]

25,649

3.75

%

23,677

3.65

%

Net yield on interest-earning assets [2]

4.00

%

3.90

%

Less: Tax-equivalent adjustment

836

863

Net interest income

$

24,813

$

22,814

[1] The average balances of assets, liabilities and shareholders' equity are computed on the basis of daily averages. Average rates are presented

on a tax-equivalent basis. Certain reclassifications have been made to prior period amounts to conform to current presentation.

[2] Interest and/or average rates are presented on a tax-equivalent basis.

[3] Includes loans held for sale and loans held in portfolio; all loans are domestic. Nonaccrual loans are included in amounts